Solicitor’s duty in estate planning – How far does it go?

On 11 May 206 the High Court of Australia unanimously allowed an appeal from the decision of the Full Court of Tasmania. In the decision of Robert Badenach & Anor v Roger Wayne Calvert [2016]HCA 18, the High Court held in the circumstances of the case, a solicitor did not owe a duty of care to a beneficiary under a Will to advise the testator of the options available to the testator to avoid exposing his estate under the Testator’s Family Maintenance Act 1912 (Tas) (“TFM Act”).

The Solicitor received instructions from the client to prepare his Will, which left the whole of his estate to the respondent, who was the son of the client’s long term defacto partner. The client’s principal assets were two properties which he owned as tenants in common in equal shares with the respondent. The client signed the Will and subsequently died later that year.

Testator’s Family Maintenance Act

Following his death, his daughter from a previous marriage brought proceedings under the TFM Act and was successful in obtaining an order that provision be made for her out of the client’s estate. As a result the client’s estate was substantially depleted.

The respondent brought proceedings against the Solicitor and the law firm where the solicitor worked. The respondent claimed that the solicitor had been negligent in failing to advise the client of the possibility that his daughter might make a claim under the TFM Act and the options available to him to reduce or extinguish his estate to avoid such a claim.

At first instance, the Supreme Court of Tasmania held that the solicitor owed the client a duty of care to enquire as to the existence of family members and after discovering that the client also had a daughter, to advise the client of the risk to his estate of a successful claim under the TFM Act. However, the primary judge was not satisfied that the solicitor’s advice about a potential TFM Claim would have triggered an enquiry by the client about how to protect the respondent’s position.

The Full Court allowed the respondent’s appeal. In their Honour’s view, the solicitor’s duty to the client extended to advising of the possible steps the client could take to avoid exposing his estate to a TFM claim, even if the client did not make any enquiry about those steps. The Full Court also held that the solicitor owed a duty of care to the respondent that was co-extensive with that owed to the client.

Appeal to the High Court

By grant of special leave, the solicitor and law firm appealed to the High Court.

The High Court held that the duty to the respondent recognised by the Full Court did not arise. The interests of the client were not coincident with the interests of the respondent and as such the solicitor could not owe any duty to the respondent that was co-extensive with the solicitor’s duty to the client.

Wills and Estates expert lawyer is a must

In the writer’s opinion the High Court decision allows the wills and estates partitioner to focus on the testator’s wishes, instructions and questions, without getting sidetracked and having to worry about duties owed to beneficiaries. It also emphasises the importance of having a Wills and Estates expert prepare your last Will and Testament instead of a generalist lawyer.